Sofas, flooring and furniture retailer ScS has reported a growth in half-year sales as losses narrowed.

According to its interim results for the 26 weeks ended 28 January 2023, total sales rose 3.4% to £154.9m from £149.8m against the same period last year. Gross profit stood at £67.8m, while underlying pre-tax losses resulted at £4.7m, improving from a loss of £5.6m.

ScS said it delivered a strong winter sale with the last 10 weeks of the period seeing like-for-like order intake growth of 2.6%, as well as achieving market share gain.

During the period, ScS opened two new stores in York and Swindon, while also implementing its new concept design into two further stores in Gateshead and Uddingston.

ScS also exceeded 400,000 reviews on Trustpilot, making the retailer the 5th most reviewed company in the UK. ScS also achieved Kitemark certification for domestic furniture by the British Standards Institute – making it one of only three furniture retailers in the UK to hold this stamp of approval.

Furthermore, On 10 January 2023 the Group acquired, out of administration, the brand, domain names, website, intellectual property and stock of Snug for £875,000. Since the acquisition, the business has “worked hard” to re-establish relationships with suppliers, replenish stock and relaunch trading. Snug is now fully operational, trading from the website and currently operates from one store in Leeds and seven concessions throughout England.

“We plan to launch Snug concessions into our ScS showrooms in the coming months, which will help build the national presence and awareness of the brand. These concessions will be trialled in our concept stores,” ScS said. “We are pleased with the Snug acquisition which we expect will be earnings accretive in FY24. We intend in invest in the business throughout H2 and expect Snug will report a second half loss before tax of £1m.”

ScS added that online sales have increased 16.7% compared to the prior period and now represent 10.1% (H1 FY22: 8.9%) of total gross sales. Supporting this, the retailer has increased digital engagement with customers as well as improving the customer journey. This includes the implementation of a ‘Q%A section’ on product pages across the website, creating a ‘visual bundling solution’ that enables the customer to add multiple items into one image to visualise how products will look together, the launch of an AI visualiser technology to some of its flooring ranges and the development of an online wishlist, where customers can save their favourite products and share with its retail teams.

Moving to showrooms, ScS’ key focus is the continuous new concept store design rollout, as indicated earlier. “We continue to obtain valuable insight from the concept stores, through performance and customer feedback, such as understanding which layouts are most successful, where certain brands are best displayed and how technology can support the customer journey. Following the success of our initial concept stores, we have now planned investment in a further eight stores before the end of the financial year,” ScS said.

“As we continue to enhance the in-store experience, we have rolled out our ‘declutter’ programme, which commenced in FY22, across the entire store network. This included reducing the amount and size of the point of sale materials and being more selective around some of the ranges on display. This programme contributed to an increase in display stock sales in the period.”

As for current trading, like-for-like order intake momentum continued to improve after the period end, with growth of 5.7% in the 7 weeks to 18 March 2023. However, order intake for the 33 weeks is down 2.8%.

ScS said it plans to invest in a further eight stores to adopt its new concept design and remains on track to deliver a full year profit before tax in line with market expectations.

Steve Carson, Chief Executive Officer of ScS, commented: “The Group made good strategic progress in the first six months of the financial year and continued to take market share. We are pleased with the strength of our winter sale performance and the subsequent increase in order momentum over the last two months.

“The macroeconomic environment continues to be challenging and we are mindful of the pressures faced by many of our customers. Therefore, continuing to focus on our value driven proposition is more important than ever so that everyone is able to create the home they love.

“The Board continues to believe that progress with the Group’s strategy, ongoing cost management and a robust balance sheet places it in a strong financial and operational position. The outlook, therefore, is positive and ScS remains on track to deliver full year profit before tax in line with market expectations.”